How to cut strata rage: quick justice

Apartment owners corporations could gain new powers to enforce their buildings’ by-laws under a wide-ranging review of strata title laws by the NSW Government.

This could be a boon for people who are looking for quicker, simpler ways to end disputes that inevitably arise in an apartment building. But it could also mean prospective owners should pay more attention to a building’s by-laws, on issues such as pets, noise and smoking. It may become harder to take a cavalier attitude to them.

In a discussion paper for reforming archaic strata title laws, NSW Fair Trading has raised the possibility of, for example, reinstating the power of owners corporations to use wheel clamps on people abusing visitor parking spots.

The owners corporation could be given powers to issue fines of up to $500 to other apartment owners for by-law breaches without the involvement of government authorities. Owners could lose the right to hire lawyers to attend mediation sessions for them, leaving them alone to face the wrath of their neighbours. And maximum fines for breaches of some offences could be lifted from a few hundred dollars to tens of thousands of dollars.

“One option is to restore an element of deterrent and fear of consequences into the system," the discussion paper says.

Michael Teys, founder and chief executive of TEYS Lawyers, says the NSW system of dispute resolution is “without a shadow of doubt" the worst in eastern seaboard states. There is no obligation for schemes to enforce their own by-laws.

“What you need in this area is quick, rough justice," Teys says. “If you let things simmer away for the 12 weeks it presently takes to get a [Consumer, Trader and Tenancy Tribunal] adjudication dealt with, people are going to be literally at each other’s throats before the dispute is resolved."

The current process for making complaints against fellow owners is cumbersome. The first step is to apply for mediation, which can be done through NSW Fair Trading or other mediation services.

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If that fails, owners can apply to the Consumer, Trader and Tenancy Tribunal with written submissions stating their case. There is no hearing and the adjudicator is not able to clarify conflicting pieces of information. It’s a step that works in the favour of lawyers and eloquent writers, and against people from non-English-speaking backgrounds.

If any party is not happy with that result, the dispute is heard at the CTTT. The whole process can take years and thousands of dollars, and frustrated owners have been known to take matters into their own hands by slashing tyres and jamming locks with glue.

“People might have a very basic dispute about parking or pets or partying," Teys says. “If they were able to get in a room before some sort of adjudicator within days of these disputes happening, most of these disputes would go away."

There are some glaring statistics to show just how ineffective the current system is. According to NSW Fair Trading, less than half of all mediation applications result in mediation. The respondent can simply refuse to attend without consequence, leaving the applicant to pay the $76 fee.

The use of lawyers is on the rise, which makes the proceedings more costly and leaves anyone who can’t afford a lawyer at a disadvantage.

And the CTTT is powerless to handle some of the most common types of complaint. Compensation for damage caused to common property, or reimbursement for urgent repairs, or actions to recover outstanding levies, or disputes that arise when an owner wants to do a renovation that the scheme doesn’t like, are all matters that need to be dealt with in the regular courts, not the CTTT.

In some cases, claims need to be pursued in both. When a scheme neglects maintenance of common property, causing damage to an owner’s personal property, the local courts handle the claim for compensation, while the CTTT gives the order for repairs.

In the 2011-12 financial year there were 155 applications to the CTTT seeking a penalty for breach of by-law, or less than three across NSW each week. NSW Fair Trading believes there are far more by-law breaches taking place than this, and is considering giving schemes or building managers the right to issue fines for by-law breaches, without applying to the CTTT.

“That’s what happens in the United States and the market is 10 times as large," says David Ferguson, managing director of StrataPlus and NSW president of Strata Community Australia.

He wants council parking officers to have the ability to mete out parking fines on strata common property. Apartment visitor parking spots are open to abuse.

“It can take six months to win and the best you get out of it is $550," he says. “And you don’t even get the money, it goes to the Office of State Revenue."